Auditors follow a four step approach to reduce assessed control risk. Which of the following is not one of the four?
A) Apply transaction related audit objectives to a class of transactions.
B) Indentify accounts that have high inherent risk.
C) Identify key controls that reduce control risk.
D) For potential misstatements, design appropriate substantive tests of transactions.

Question

Quizplus · Accepted Answer

The four steps to reduce assessed control risk are: 
1) Identify specific controls that will be tested
2) Test the controls to determine whether they are operating effectively
3) Assess the control risk, based on the results of the tests of controls
4) For potential misstatements, design appropriate substantive tests of transactions. 
Identifying accounts that have high inherent risk is not one of these steps.

Auditors Follow a Four Step Approach to Reduce Assessed Control